February Begins with Rising Gas Prices

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Thursday, 08 June 2017 11:28

February Begins with Rising Gas Prices

Gas Prices Increasing After Dropping to Lowest Levels Since 2009

U.S. average gas prices have increased seven days in a row for a total of two cents per gallon. Gas prices had declined a record 123 consecutive days to $2.03 per gallon before increasing last week for the first time since September 25.
“Many drivers are noticing an uptick in gas prices for the first time in months,” said Avery Ash, AAA spokesman. “It is typical to see gas prices increase this time of year due to refinery issues, yet hopefully the consumer impact will be less problematic given how low prices are today.”
Today’s national average price of gas is $2.06 per gallon, which is about $1.22 per gallon less than a year ago. AAA estimates that Americans are spending about $365 million less per day on gasoline compared to this time last year.
The national average price of gas reached a current 2015 low on January 26 of $2.03 per gallon, which was the lowest average since March 27, 2009.
Gas prices have dropped about $1.64 per gallon since reaching a national average of $3.70 per gallon on April 28, 2014.
The average price of gas in January was $2.11 per gallon, which was the cheapest monthly average since April 2009. Gas prices in December 2014 averaged a much higher $2.51 per gallon, while the average was $3.30 per gallon in January 2014.

Gas prices have increased due to a combination of refinery issues and more stable crude oil costs. Refinery maintenance season is beginning and there also have been a number of refinery upsets, which can limit production. In addition, crude oil prices have stabilized, which has prevented any further declines in the price of gasoline.

Average gas prices had dropped to nearly $2 per gallon due to the steep decline in the cost of crude oil during the previous six month. Domestic crude oil prices (WTI) have fallen by more than half since June due to abundant supplies. U.S. oil production has increased by more than 70 percent since 2008, and this increase in production has helped to outstrip global demand, especially as economic concerns mount in both Asia and Europe.

Gas prices generally are at or near seasonal lows in January due to relatively weak demand. Many Americans cut back on driving and travel during the cold winter months, which can allow gasoline supplies to build.

Consumers Likely to See Gas Prices Continue Rising in February

AAA expects gas prices to increase this month due to refinery maintenance and decreased production. It is not uncommon for gas prices to increase 30-50 cents per gallon between early February and the middle of spring. Gas prices in February have increased during the previous five years by an average of 22 cents per gallon.
“It is a good bet that most drivers will pay more for gasoline in March than today,” continued Ash. “Yet even if gas prices increase as expected, drivers should continue paying at least a dollar less on gasoline than what they spent in recent years during the spring.”
Gas prices should remain less expensive than in recent years due to lower crude oil costs. AAA does not expect the national average price of gas to rise above $3 per gallon in 2015.
It is possible that gas prices could rise more slowly or even drop if there are further significant declines in the cost of crude oil. At this point, the crude oil market remains very volatile and it is possible that crude oil supplies could build further during refinery maintenance season. A significant reduction in crude oil prices could limit any prices increases due to refinery maintenance.
Many refineries conduct maintenance and upgrades in the spring to prepare equipment for the busy summer driving season. This maintenance can reduce gasoline production at a time when both driving and gasoline demand rises as the weather improves.

More than Half of U.S. Stations Selling Gas for Less than $2 per Gallon

Gas prices remain relatively cheap across the country with more than half (52 percent) of U.S. stations selling gas for less than $2 per gallon today. The most common price in the country is $1.999 per gallon. More than 6 in 10 stations were selling gas for less than $2 per gallon a week ago.
Drivers can find at least one station selling gas for less than $2 per gallon in every state within the continental United States. No stations in Alaska or Hawaii have reached that mark.
The five states with the lowest average prices today include: Idaho ($1.85), Texas ($1.87), Oklahoma ($1.87), South Carolina ($1.87) and Utah ($1.87). The five states with the highest average prices today include: Hawaii ($3.11), Alaska ($2.64), California ($2.45), New York ($2.39) and Vermont ($2.30).
Twenty-five states have an average gas price below $2 per gallon, though this number has decreased from 28 states last week.